Financial Performance - Total revenue for the six months ended June 30, 2020, was $27,966,265, a decrease of 10.1% compared to $31,501,020 for the same period in 2019[15] - Net loss attributable to 1847 Holdings shareholders for the six months ended June 30, 2020, was $(4,914,999), compared to $(1,193,530) for the same period in 2019, representing a significant increase in losses[15] - The company reported a net loss from operations of $(3,534,755) for the six months ended June 30, 2020, compared to $(1,556,396) for the same period in 2019, indicating worsening operational performance[15] - For the six months ended June 30, 2020, the net loss was $6,922,321 compared to a net loss of $1,890,999 for the same period in 2019, representing an increase of approximately 266%[20] - The company reported a loss from operations of $9,251,910 for the six months ended June 30, 2020, compared to a loss of $5,031,254 for the same period in 2019[93] Assets and Liabilities - Total current assets as of June 30, 2020, were $13,452,502, up from $5,726,093 as of December 31, 2019, indicating a substantial increase of 134.5%[12] - Total liabilities increased to $37,974,843 as of June 30, 2020, compared to $23,230,786 as of December 31, 2019, reflecting a rise of 63.5%[12] - The company’s accumulated deficit reached $(9,317,042) as of June 30, 2020, compared to $(4,402,043) at the end of 2019, highlighting ongoing financial challenges[12] - The company has negative working capital of $16,392,429 as of June 30, 2020[85] - Total receivables increased to $3,863,604 as of June 30, 2020, up from $2,482,456 on December 31, 2019, representing a growth of approximately 55.6%[95] Cash Flow and Liquidity - Cash and cash equivalents increased to $4,340,001 as of June 30, 2020, compared to $238,760 as of December 31, 2019, showing a significant improvement in liquidity[12] - The company reported a total cash balance of $4,515,991 at the end of June 2020, up from $317,836 at the end of June 2019, indicating a significant increase in liquidity[20] - Operating activities generated net cash of $3,800,759 for the six months ended June 30, 2020, compared to a net cash used of $452,738 in the same period of 2019, reflecting a positive operational cash flow shift[20] - Customer deposits increased significantly to $5,861,609 in June 2020 from $1,107,639 in June 2019, indicating strong customer engagement and potential future revenue[20] Revenue Growth - The company reported a significant increase in furniture and appliances revenue to $26,148,192 for the six months ended June 30, 2020, compared to $10,616,050 for the same period in 2019, reflecting a growth of 146.5%[15] - Goedeker's total revenue for the three months ended June 30, 2020, was $16,471,014, a 55.5% increase from $10,616,050 in the same period of 2019[53] - Appliance sales for Goedeker reached $13,188,035 in the three months ended June 30, 2020, compared to $8,759,916 in the same period of 2019, marking a 50.5% increase[53] - Goedeker's furniture sales increased to $2,944,013 for the three months ended June 30, 2020, from $1,702,284 in the same period of 2019, representing a 73.0% increase[53] Acquisitions and Investments - The company completed the acquisition of Asien's Appliance, Inc., increasing its ownership to 95%, which is expected to enhance its market presence[25] - The Goedeker acquisition was completed for a total purchase price of $6,200,000, which included $1,500,000 in cash and a promissory note of $4,100,000[106] - The fair value of the net liabilities assumed in the Goedeker acquisition was approximately $614,337, resulting in goodwill of $5,097,752[115] - The company identified intangible assets of $2,117,000 and $34,000 from the acquisitions of Goedeker and Neese, respectively, amortized over an estimated useful life of 7.8 years[101] Debt and Financing - The company received Payroll Protection Program loans totaling $1,383,700 from the SBA under the CARES Act[87] - The company is in technical default on its loan agreements but has classified the debt as a current liability[154] - The principal balance of the term note with SBCC was $877,604 as of June 30, 2020, with a cash interest rate of 11% per annum[146][147] - The company has plans to return to full compliance with loan covenants, including proposals from new lenders[145] Operational Segments - The company has transitioned to two reportable segments: Retail and Appliances, and Land Management, to better align with its operational focus[32] - The Retail and Appliances Segment includes a retail store and e-commerce platform, with a recent acquisition in Santa Rosa, California, expanding service offerings in the appliance sector[33] Miscellaneous - The company reported stock compensation expenses of $436,386 for the six months ended June 30, 2020, reflecting ongoing investment in employee incentives[20] - The company has contingency plans to reduce or defer expenses and cash outlays should operations not improve in the look-forward period[89] - The company does not incur incremental costs for obtaining purchase orders, as all contracts are less than a year in duration[41]
1847 LLC(EFSH) - 2020 Q2 - Quarterly Report